Bourses are contemplating resuming share-netting facility after 17 years as they believe this trading system will help reverse the slumping turnover.
Netting is used in share trading, where an investor can change his position on a single day.
For example, if an investor sells 100 shares of a security in the morning session and can buy the same scrip in a subsequent session of the same day.
This accelerates the speed of fund while boosting commission earning by the stock brokers.
The netting system was operational until 2002 after its launch in 1996.
The bourses failed to continue the system as many stock brokers, stock dealers had fund crisis and other complexities during the period.
People familiar with the system told the FE that they have already met the officials of the Bangladesh Securities and Exchange Commission (BSEC) several times to discuss the matter to weigh up the matter.
Officials of the Dhaka Stock Exchange (DSE), the main bourse, will sit with their BSEC counterparts early next month.
Md Shaifur Rahman Mazumdar, managing director at the Chittagong Stock Exchange (CSE), told the FE this is important for the market as it mitigates risks in buy and sale.
"It helps reduce price manipulation of many small-cap listed companies," he said.
Although there is no restriction in the DSE's regulations, a BSEC directive is in place blocking single-scrip netting.
Mr Mazumdar said this type of trading is available on many bourses across the world.
He said since it is synchronised with the Central Depository Bangladesh database, there is little scope for abuse.
KAM Majedur Rahman, managing director at the DSE, told the FE that the Commission would inspect their system for the purpose.
"We do hope that the BSEC may give its consent shortly," Mr Rahman told the FE.
He said a problem may crop up if the security is not available for purchase at the later session of the day.
The DSE management chief suggests that the 'short-selling' mechanism should also be introduced in this connection.
Short-selling is the sale of a security that the seller has borrowed. A short seller makes profits if a security's price declines and loses when the price goes up.
The DSE had issued a regulation on short-selling sometime in 2006 but it did not implement due to lack of adequate incentives for the parties concerned.
The bourse is now working on a new short-selling regulation.
A BSEC official told the FE they have been working on the issue with the exchanges and after inspection, the Commission will decide take a decision.
Experts argued that this kind of netting should not be resumed right at the moment as the market is passing through a bad time mainly in terms of index.
Dr Mirza Azizul Islam, an economist and former caretaker government advisor, told the FE that this element should not be introduced right at this moment.
"There were arguments when it was stopped, so we must ensure whether those issues are addressed properly or not."
He said the market has shed around 1,000 points over the last one year. "This is not good time for such an element," he added.
Former BSEC chairman Faruq Ahmed Siddiqi said the system, if introduced, would lead to a rise in the turnover, but it would not play any role in the market development.
However, no price manipulation would be possible through this trading system, he added.
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